In British Columbia, more and more couples are choosing to live together without the formal institution of marriage. While the decision to cohabit can offer emotional fulfillment and shared companionship, it can also bring up legal concerns regarding joint property and support obligations if the relationship were to end. This is where a cohabitation agreement can be a crucial tool.
In BC, a cohabitation agreement is a legally binding document that outlines the rights and responsibilities of each partner while living together. This agreement can help couples protect their assets and establish clear terms for things like property division, debt obligations, and even spousal support in the event of separation or death.
In this blog post, we will delve into the basics of cohabitation agreements in BC and why you should consider getting one.
Cohabitation Agreements in British Columbia
A cohabitation agreement is a contract between two people who live together (or plan to live together) in a marriage-like relationship. It can outline how the couple will handle matters such as:
- Division of property and assets
- Responsibility for debts
- Spousal support or financial assistance
- Rights related to children (if applicable)
Legal Framework for Cohabiting Couples in BC
In BC, the Family Law Act governs the legal rights and responsibilities of individuals in relationships, including those who are cohabiting but not married. In accordance with the Act, once a couple has lived together for at least two years, they may be considered “spouses” in the eyes of the law, even though they haven’t married. This designation brings with it rights related to property division and spousal support if the relationship ends.
However, this can sometimes lead to unintended consequences. For instance, if one partner owns a home or significant assets before cohabitation, the other partner may have a claim to those assets if the relationship ends, even if they never contributed to them. A cohabitation agreement can address these potential issues and make clear how assets should be divided if the relationship dissolves.
Why Do You Need a Cohabitation Agreement?
1. Protection of Property
One of the primary reasons couples choose to enter into a cohabitation agreement is to protect their individual assets. For example, if one partner owns a home before moving in together, the other partner may be entitled to a portion of the value of the home under BC’s Family Law Act if the relationship ends after two years of cohabitation.
With a cohabitation agreement, the couple can specify that the property remains solely the property of the original owner, preventing claims on it should the relationship break down.
2. Clarifying Debt Responsibilities
Debt can become a contentious issue if not clearly defined. A cohabitation agreement can clarify how debt will be handled during and after the relationship, whether it’s credit card balances, student loans, mortgages or loans taken out jointly. This can help prevent one party from being unfairly burdened with debts that were incurred by the other.
3. Setting Expectations for Spousal Support
Under BC’s Family Law Act, a partner in a cohabiting relationship may be entitled to spousal support after separation, like those in a marriage. A cohabitation agreement can lay out the terms under which support will be paid, or, alternatively, if one partner waives the right to support.
This part of the agreement is particularly helpful if one partner earns significantly more than the other, or if one partner has sacrificed career advancement for the sake of the household or children.
4. Prevention of Future Conflict
Having a cohabitation agreement in place can prevent future disputes, ensuring both partners are clear on their rights and responsibilities. Knowing where you stand legally can reduce tension and uncertainty, allowing the relationship to focus on companionship rather than on financial worries or asset disputes.
Key Elements of a Cohabitation Agreement in BC
When drafting a cohabitation agreement in BC, several critical areas should be addressed to ensure it is comprehensive and legally sound. These include:
- Property Division: A cohabitation agreement should outline what happens to assets accumulated during the relationship. You can specify whether assets remain individual or whether there will be a shared interest in them.
- Spousal Support: The agreement can address whether either partner will receive spousal support in case of separation and how much support will be provided, if applicable.
- Debt Responsibility: Clearly state who will be responsible for paying off joint or individual debts during and after the relationship.
- Children: If the couple has children, the agreement can lay out responsibilities for child care, support, and other parenting duties.
- Termination Clauses: The agreement can also include provisions for what happens in the event of separation, ensuring that both parties understand the process for asset division and other matters.
The Process of Creating a Cohabitation Agreement in BC
Creating a cohabitation agreement is a relatively straightforward process, but there are a few important steps to take to ensure that it is valid and enforceable:
- Discuss Your Priorities: Both parties should openly discuss what matters to them most in terms of assets, debt, and other financial considerations. Be sure to be clear on each person’s priorities.
- Consult a Lawyer: While you can create your own cohabitation agreement, it’s highly advisable to consult a lawyer to ensure that the agreement adheres to the Family Law Act and is enforceable under BC law. A lawyer will help you tailor the agreement to your specific needs and ensure that it’s fair to both parties.
- Sign and Date the Agreement: Once both parties have come to an agreement, each person should sign and date the document in front of a witness. In some cases, the agreement may need to be notarized to be fully enforceable.
- Keep a Copy: Make sure each party keeps a copy of the signed agreement, and store it in a safe location.
Using a Lawyer for a Cohabitation Agreement
Living together without marriage can offer flexibility and freedom, but it can also create legal complexities, especially in the event of a breakup. A cohabitation agreement is a simple, yet effective, way to safeguard your financial interests and avoid disputes. It allows couples in BC to set clear terms for the division of property, debt responsibility, and potential spousal support. This helps ensure that both partners are protected without the need for a formal marriage.
If you’re cohabiting or planning to live with a partner in the near future, consider consulting a family lawyer to discuss the benefits of a cohabitation agreement. It could save you from future legal and financial headaches, providing peace of mind for both you and your partner.